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dollar bills scattered loosely

Pay bills first, then make a plan to save any money left from stimulus checks or tax refunds.

Once bills are paid, put stimulus money into savings

Same goes if you are expecting a tax refund, say K-State experts

April 23, 2020

MANHATTAN, Kan. – If you’ve received – or will be receiving – a stimulus check from the federal government, it’s a good idea to have a plan for what you will do with that money.

What you should not do, say a trio of K-State experts, is go out and spend it on things you may not need right now.

“I think you should save every penny you can,” said Susie Latta, a family and consumer sciences agent with the K-State Research and Extension office in Marshall County. “Don't buy things you don't really need or purchase subscriptions that aren't really necessary like Netflix, Hulu, iRacing and so on. Only buy such things as food and supplies that you will use.”

The federal Coronavirus Aid, Relief and Economic Security Act – better known as CARES – provides a one-time payment to tax-paying Americans based on the adjusted gross income in their 2018 or 2019 taxes. Depending on income levels and whether the taxpayer is married and has children, the payment could be $3,000 or more.

“The best use of that money if you’re currently unemployed is to pay your bills, including house payments, utilities and food,” said Gary Fike, director of the K-State Research and Extension office in Riley County.

“But if you’re still working and you still have income, the best use of that money is toward reducing debt. Eighty percent of Americans live paycheck to paycheck and it’s because for the most part, we are up to our eyeballs in debt. So take that $3,000 and pay down some existing debt, whether it be a car loan, student loan, hospital bills or consumer credit.”

Listen to Gary Fike on the radio program, Extension Files, hosted by Randall Kowalik and Jason Hackett

Debra Wood, a family resources management agent in the Central Kansas Extension District, said that for some people, medicine is a critical expense. And, if you’re working from home, maintaining Internet service is another necessity.

“It is important to list all bills and prioritize,” Wood said. “If you have never used a budget, now is a good time to start. We can’t really get a handle on our finances until we know what resources we have and where the money is going.

“Ask yourself: ‘What will happen if I don’t pay this bill?’ What are those expenses needed to stay in your house and keep the utilities connected? What things do you need to keep or get a job? What insurance do you need to pay – car insurance, health insurance, home or renters‘ insurance? Some companies have special programs to help people right now, so if there are bills that can’t be paid reach out to those businesses or creditors to see if you can put some of them on hold temporarily.”

Fike added that if you are in the enviable position of not having debt, put the money into an interest-bearing savings account or CD to use in emergency.

“If we all lost our jobs tomorrow, there would be a lot of people who would have a difficult time keeping up payments on a house or a car,” Fike said. “When we live paycheck to paycheck, it becomes critical that we don’t go into default on a loan or have some of those difficulties staring us in the face.”

There is a lot of uncertainty right now,” Wood added. “We don’t know how long this is going to last, and those who still have a job will be better prepared for the future in the event of a job loss if they can cut out unnecessary spending now and save that money.”

Latta added that other ways to save money including mowing your own lawn instead of hiring it done; sell stuff you don’t want or need anymore; plant a garden; and use things you have versus buying something new.

“If you’ve lost your job, I encourage people to apply for SNAP benefits,” she said, referring to the Supplemental Nutrition Assistance Program administered by the U.S. Department of Agriculture. “That program is increasing benefits and has waived requirements due to the pandemic. In the past, some single households may have received a very small benefit of $12 but with the pandemic, benefits may have increased to as much as $194 for April and May.”

The IRS and the Kansas Department of Revenue recently pushed back the filing deadline for 2019 taxes to July 15. “Those who have not yet filed and are expecting a refund should file as soon as possible,” Wood said. “That refund can help to cover the shortfall from a job loss.”

“Recently I got a little bit of a chastising from somebody who said they’re supposed to go out and spend this money to stimulate the economy,” Fike said. “If you’ve got everything else paid up, sure, go out and spend that money.”

“But when you’re talking about survivability, and you’re talking about making all your bills so that what you do have isn’t taken away, your first responsibility should be toward paying that debt down and forgetting about everything else. It doesn’t stimulate the economy, but it makes us more financially able to weather storms when they come, like this one.”

More financial resources for individuals and families are available online at K-State Research and Extension’s Family Finances. More general information about working and living through the COVID-19 pandemic is available at COVID-19 Extension Resources.

At a glance

K-State experts urge Kansans to make a plan on how to best use money they may be receiving from the recent CARES Act or tax refund.


K-State Research and Extension, Family Finances

Notable quote

“Eighty percent of Americans live paycheck to paycheck and it’s because for the most part, we are up to our eyeballs in debt. So take that (stimulus check) and pay down some existing debt, whether it be a car loan, student loan, hospital bills or consumer credit.”

-- Gary Fike, director, K-State Research and Extension Riley County


Susie Latta

Debra Wood

Gary Fike

Written by

Pat Melgares


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K‑State Research and Extension is a short name for the Kansas State University Agricultural Experiment Station and Cooperative Extension Service, a program designed to generate and distribute useful knowledge for the wellbeing of Kansans.
Supported by county, state, federal and private funds, the program has county extension offices, experiment fields, area extension offices and regional research centers statewide. Its headquarters is on the K‑State campus in Manhattan.